Tag Archives: Saizen Reit

Property trust says maturity default not likely to affect its ability to operate

Singapore-listed property trust Saizen Reit said yesterday it had defaulted on a 7.253 billion yen (S$112.65 million) commercial mortgage-backed securities loan.

The company said in a statement the ‘maturity default’ was not expected to affect Saizen Reit’s ability to operate as a going concern nor impair its ability to get further financing.

A maturity default occurs when the borrower fails to pay the lender the balloon payment, or principal balance, at maturity.

‘The main impact of this maturity default is an increase in the interest rate from 3.07 per cent to a default rate of 7.07 per cent per annum,’ Saizen said in a statement.

The loan, known as ‘YK Sintoku’, is a non-recourse and not cross-collateralised against other properties in Saizen Reit’s portfolio. It was originally provided by Credit Suisse Principal Investments Ltd, a unit of Credit Suisse, in 2005 and was later securitised and transferred to an issuer of the commercial-mortgage backed securities, the statement said.

Saizen, which went to market in November 2007, is the only Singapore-listed real estate investment trust (Reit) with purely Japanese regional residential properties.

Source : Business Times – 4 Nov 2009

Yugen Kaisha JOF, a subsidiary of mainboard-listed Saizen REIT, has entered into an agreement for a S$15.7-million loan from Japan’s Mizuho Bank.

The loan, which has been fully disbursed, has a term of 10 years.

Under the terms, the asset manager of Saizen will act as a guarantor for the loan, and the property portfolio of Yugen will be pledged as security for the loan.

The proceeds will be used to fully repay a S$6.3-million short-term bridging loan that the Saizen unit has from Star Finance, and the balance will be used for working capital purposes.

Saizen said on Thursday its asset manager plans to explore further financing possibilities with Mizuho.

Source : Channel NewsAsia – 1 Oct 2009